Thomas v Romeo Lockleys Asset Partnership (No 3)
[2022] FCA 1455
•15 November 2022
FEDERAL COURT OF AUSTRALIA
Thomas v Romeo Lockleys Asset Partnership (No 3) [2022] FCA 1455
File numbers: SAD 105 of 2020
SAD 169 of 2020Judgment of: CHARLESWORTH J Date of judgment: 15 November 2022 Date of publication of reasons: 1 December 2022 Catchwords: REPRESENTATIVE PROCEEDINGS – Administrator of distribution scheme appointed by the Court – Administrator granted liberty to apply – Administrator seeking orders premised on an allegation that the respondents are in breach of approved settlement agreement – allegation of breach not established – Administrator asking the Court to substitute the timeframe for payments to Group Members – whether it is just to make orders setting timeframes different to those agreed between the parties – role of Administrator is to administer the Deed in accordance with its terms, not to agitate for more beneficial terms for Group Members Legislation: Federal Court of Australia Act 1976 (Cth) s 33V Cases cited: Thomas v Romeo Lockleys Asset Partnership [2022] FCA 1106
Thomas v Romeo Lockleys Asset Partnership (No 2) [2022] FCA 1276
Division: Fair Work Division Registry: South Australia National Practice Area: Employment and Industrial Relations Number of paragraphs: 70 Date of hearing: 15 November 2022 SAD 105 of 2020 Counsel for the Applicant: Mr R Markham Solicitor for the Applicant: Adero Law Counsel for the Respondents: Mr T Duggan KC Solicitor for the Respondents: Crawford Legal Counsel for Adero Law: The non-party Adero Law appeared by its representative Mr R Markham SAD 169 of 2020 Counsel for the Applicant: Mr R Markham Solicitor for the Applicant: Adero Law Counsel for the Respondents: Mr T Duggan KC Solicitor for the Respondents: Crawford Legal Counsel for Adero Law: The non-party Adero Law appeared by its representative Mr R Markham ORDERS
SAD 105 of 2020 BETWEEN: CHRISTOPHER PETER THOMAS
Applicant
AND: ROMEO LOCKLEYS ASSET PARTNERSHIP, BEING THE PARTNERSHIP OPERATED BY LOCKLEYS FOODLAND PTY LTD AND ROMEO LOCKLEYS HOLDINGS PTY LTD (ABN 12 244 067 815)
First Respondent
LOCKLEYS FOODLAND PTY LTD (ACN 108 166 276)
Second Respondent
ROMEO LOCKLEYS HOLDINGS PTY LTD (ACN 108 157 928)
Third Respondent
SAD 169 of 2020 BETWEEN: MARTIN SHINA
Applicant
AND: “ROMEO NSW PARTNERSHIP” BEING THE PARTNERSHIP OPERATED BY ROMEO NSW INVESTMENTS PTY LTD AND THE TRUSTEE FOR ROMEO NSW HOLDING TRUST (ABN 11 807 080 683)
First Respondent
ROMEO NSW INVESTMENTS PTY LTD (ACN 156 756 544)
Second RespondentROMEO NSW HOLDINGS PTY LTD (ACN 156 757 809)
Third Respondent
ORDER MADE BY:
CHARLESWORTH J
DATE OF ORDER:
15 NOVEMBER 2022
THE COURT ORDERS THAT:
1.The Administrator’s application for orders in terms of the short minutes of order
submitted to the Court on 4 November 2022 is dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Revised from the transcript)CHARLESWORTH J
On 19 September 2022, the Court made orders pursuant to s 33V(1) of the Federal Court of Australia Act 1976 (Cth) approving the settlement of these two representative proceedings. The terms of the settlement are recorded in a Deed of Settlement and Release and a Settlement Scheme forming annexures RMM1-1 and RMM1-2 to the affidavit of Mr Rory Michael Markham sworn on 17 November 2021.
On 15 November 2022, the Court dismissed an application made by Adero Law in the exercise of the liberty to apply in the proceedings. A n order was subsequently entered as follows:
The Administrator’s application for orders in terms of the short minutes of order submitted to the Court on 4 November 2022 is dismissed.
Oral reasons for that order were given on the day of the hearing. The Court now publishes written reasons to the same effect.
The application for approval was commenced in this Court by way of interlocutory application filed not long after the Deed was executed. The approval hearing became fragmented and complicated because of issues concerning the questions of costs which need not be elaborated upon here. As a consequence, the Court did not approve the settlement for almost ten months.
The settlement was approved on 19 September 2022 by orders of this Court (Settlement Orders). Understandably, the beneficiaries of the Deed, that is, the Group Members (comprising former and current employees of the respondents) wish to receive their distribution of money in accordance with the Deed.
By paragraph 3 of the Settlement Orders, Adero Law (also the lawyers for the lead applicants) was appointed as the Settlement Administrator of Scheme. It was authorised to act in accordance with clause 3 of the Scheme, subject to any discretion of the Court. I will return to that clause later in these reasons.
By paragraph 4 of the Settlement Orders, I ordered that Adero Law, in its capacity as Administrator, had liberty to apply in relation to any matter arising under the Scheme.
In that capacity, Adero Law, by its principal Mr Rory Markham has exercised the liberty to apply and put before the Court proposed short minutes of order expressed as follows:
(1)On or before 23 December 2022, the Respondents shall pay all entitlements owing to eligible group members whose settlement statements and payment details have been provided to the Respondent by the Settlement Administrator on or before 4 November 2022.
(2)On or before 18 January 2023, the Respondents shall pay all entitlements owing to any other eligible group members whose settlement statements and payment details have been provided to the Respondent by the Settlement Administrator on or before 5 December 2022.
(3)On or before 23 January 2023, the Respondents shall provide the Settlement Administrator written notice that all payments have been made in accordance with Orders 1 and 2 of these orders.
The Administrator’s position is that the Court should make orders expediting timeframes that are otherwise provided for in the Scheme. That application is founded on a number of discrete bases including that it is reasonable and practical for the respondents to make such expedited payments.
Mr Markham’s submissions were also founded on allegations that it apprehends that the respondents will not act in accordance with the terms of the Deed. He submitted that the respondents are intending to make a “bubble payment” on the last day which he says would not be in accordance with the terms of the Scheme. Second and relatedly, Mr Markham submitted that the respondents are not acting in good faith, or are otherwise acting in bad faith in the performance of their obligations under the Deed and the Scheme.
The respondents deny any allegation of bad faith. They submit that the Administrator is attempting to have this Court rewrite the terms of the agreement struck between the parties as recorded in the Deed and the Scheme. They submit that the Court does not have the power to rewrite the agreement and even if there were such a power, it ought not be exercised as a matter of discretion.
The Scheme forms an annexure to the Deed and contains a number of schedules. Clause 1.2 provides:
The Settlement is set out in the Settlement Deed and this Scheme and is subject to the approval of the Court, pursuant to s 33V of the Act. This Scheme does not become operative until the Effective Date.
The Effective Date is defined in clause 1.21 as the “date of entry of orders in the form of, or substantially in the form of, the Approval Orders by the Court”, that being 19 September 2022.
Clause 1.2 confirms that the Scheme itself forms a part of the Deed and has contractual force as between the parties upon the Court’s approval.
Clause 1.3 provides that “the purpose of this Scheme is to establish a procedure for the fair and just calculation of the Settlement Entitlements and the distribution of the Settlement Entitlements to Eligible Group Members”. The respondents submit that “fair and just calculation of the Settlement Entitlements and the distribution” should be understood against a framework in which the parties have in fact agreed to the methods of calculating entitlements and, critically, the timeframes in which those payments are to be made. The respondents submit that what is fair and just is to be understood as against the parties’ agreement and is not an inquiry to be conducted by the Court at large.
I am satisfied that my approval of the settlement recorded in the Deed and the Scheme necessarily carried with it an approval of those parts of the Scheme that fixed timeframes in which payments of entitlements were to be made, as well as the order of steps that must be carried out by the parties before those payments can be made.
Clause 1.6 of the Scheme contemplates a number of steps for the payment of settlement entitlements. They include the appointment of Adero Law as the Administrator of the Scheme, the appointment of William Buck as the “Determiner of the Scheme” and Vincents Accountants as the “Verifier of the Scheme”. By clause 1.6(6), the parties agreed that the respondents would “distribute Settlement Entitlements (as calculated by the Determiner and verified by the Verifier) to Eligible Group Members through the payroll systems operated by the [respondents]”. On the evidence before me, I am satisfied that in order for the respondents to make that payment, the Settlement Entitlements must be calculated by the Determiner and verified by the Verifier. In addition, to facilitate the payments, the respondents must have in their possession information (such as tax file numbers and bank account details) concerning each of the Group Members who are to share in the settlement sum.
I am also satisfied that the calculation by the Determiner as to the amounts to be paid to Eligible Group Members did not depend on the Determiner having the bank details and tax file numbers of each member. That conclusion will assume some significance in due course.
As I have said, the Settlement Orders required the Administrator to act in accordance with clause 3 of the Scheme. It relevantly provides:
3.2The Administrator will, subject to and in accordance with this Scheme, administer this Scheme in accordance with its terms, and in particular, will:
…
3.2.3issue Settlement Statements to Registered Group Members and Additional Group Members.
…
3.3The Administrator, in discharging any function or exercising any power conferred by this Scheme, shall do so as required by the Court to administer this Scheme fairly and reasonably in accordance with its terms, as a duty owed to the Court.
Those clauses emphasise that the role of the Administrator is to administer and oversee the implementation of the Scheme in accordance with its terms, not in accordance with terms that the Administrator might consider to be reasonable. Clauses 10 and 11 concern the provision of a “Final Entitlements Spreadsheet” and the provision of certain information from the respondents. This information includes any agreements, deeds or documents that the respondents consider might demonstrate that a Registered Group Member or Additional Registered Group Member might have released or has released the respondents from any claims.
There is an obligation on the Administrator under clause 11 to issue or cause to be issued to the relevant Group Members a settlement statement in an applicable form. In addition, the Administrator must issue or cause to be issued to the respondents an updated Final Entitlements Spreadsheet. It is from the date of the provision of that updated Final Entitlements Spreadsheet that certain timeframes specified in the Scheme commence to run.
Clause 12.4 is significant in the resolution of the present application. It provides:
The Settlement Entitlements will be paid to Eligible Group Members by the [respondents] over a three (3) month period, commencing on and from the date of receipt of the Eligible Entitlements Spreadsheet (Payment Phase).
The Administrator submitted (and it does not appear to be disputed) that clause 12.4 requires that payments be made over a period of time, referred to as a “Payment Phase”. The words “on and from” reinforce the view that it is not contemplated that the respondents may make a single payment to all of the Eligible Group Members on the very last day of the three month period. On the materials before me, that date is 3 March 2023. To the extent that the Administrator submits that it would be a breach by the respondents to engage in conduct of that kind, that submission is accepted. I also accept that conduct of that kind would constitute a breach of a term to the effect that the parties are to act in good faith in the administration of the Scheme.
The respondents allege, and I am satisfied, that there was a delay on the Administrator’s part. On 28 September 2022, the respondents’ solicitor distributed a Settlement Distribution Scheme timetable under which it requested the Administrator to provide the “group member database” to the Determiner and the respondent’s solicitor by 29 September 2022. The Group Member database contained necessary information of individual Group Members to enable the proper processing of payments of settlement entitlements such as bank account details.
The timetable also provided that the Determiner would calculate Settlement Entitlements and provide an entitlement spreadsheet by 31 October 2022. It was anticipated that the Determiner would provide a Final Entitlements Spreadsheet by 23 November 2022.
The Administrator did not provide the Group Member database to the Determiner on or before 29 September 2022. That material was not provided until 31 October 2022. Further tranches of information were provided in early November. While the Group Member database contains information that would assist in the distribution of payments to the Group Members, it had no bearing on any delay in the work of the Determiner in preparing the Final Entitlements Spreadsheet.
Accordingly, to the extent that there has been delay by the Administrator in providing the Group Member database, it will be necessary to ask whether or not that has had any meaningful impact on the ultimate timing of payments to beneficiaries of the Deed.
I have had regard to the circumstance that this Court made the Settlement Orders on 19 September 2022, and that the application presently before me was first foreshadowed some weeks after that date. In so concluding, I have had regard to submissions of the Administrator concerning communications passing between the Court through my Associate and Adero Law in its capacity as the solicitor for the lead applicants and not then appointed as Administrator. By letter dated 12 September 2022 Adero Law, on behalf of the lead applicants and Group Members, raised what it described as an “Enquiry”. A case management hearing was sought to enable the Court to consider the “Enquiry”.
The letter states the “Enquiry” was made on instructions from the lead applicants on the basis that a period of over 90 days had elapsed since the hearing of the interlocutory application for settlement approval. I have already mentioned that the approval hearing was fragmented. The last hearing date was 14 June 2022. It is correct that by 12 September 2022 nearly three months had lapsed since judgment on the approval application was reserved.
The context in which that delay arose is that a second approval hearing was occasioned by the Court providing the opportunity for further evidence to be adduced in support of what was referred to as the Costs Amount to be paid to Adero Law, and by the need for the Court to consider a multitude of issues affecting Adero Law’s claim for costs.
The author of the letter went on to say:
1.2We understand that there exists within the class action regime of the Federal Court of Australia, specifically subsequent to the settlement of Paul Bradshaw & Anor v BSA Limited VID488/2020, approved by his Honour Justice Bromberg, a mechanism to separate matters such as deductions of legal costs from settlement sums, from a decision of making orders approving a settlement reached between the parties. …
1.3To that extent, the Applicants intend to seek a case management hearing, if her Honour has formed a view that the settlement proposed at the Hearing should be approved, subject to any considerations such as deductions or the reasonableness of legal costs of the settlement to be decided at a later date pursuant to precedence [sic] listed above …
The “Enquiry” raised by the lead applicants was whether or not the Court would be minded to grant its approval of the Deed and the Scheme, even though it might not have reached a view as to the outcome of the costs question so the administration of the Scheme could be initiated sooner. The letter continues (at [1.4]):
Alternately, her Honour may form a view that a decision in relation to the Hearing may be forthcoming in which case there will be no utility to entertain such a case management hearing. Her Honour may also reject the Enquiry entirely. The Applicants will accept her Honour’s views of the Enquiry.
As it turns out, a decision in relation to approval was imminent, such that there was no utility in conducting such a case management hearing and dealing with the “Enquiry”. On 12 September 2022, my Associate wrote to Adero Law in the following terms:
Justice Charlesworth will not entertain the Enquiry as judgment in the above matters is near completion. If necessary, the topic can be canvassed at judgment delivery.
In the same communication, the parties were advised of the time for the delivery of judgment.
The letter of Adero Law of 12 September 2022 continued (at [2.2]):
The Applicant’s intention in making the Enquiry is to understand whether the Court, in the event the Court has formed a favourable view on the settlement proposed at the Hearing, is minded to make approval orders for the purpose of the administration of the relevant settlement scheme to take effect, whilst reserving judgement on issues such as deductions and legal costs if required. The Enquiry may allow for payments to be made to group members at least prior to December 2022.
On the present application, Mr Markham in his capacity as the Administrator, asserted that by that paragraph he (then in his capacity as solicitor for the lead applicants and Group Members) had sought to agitate the very issue that is now before me. Namely whether there should be orders providing for a different timeframe of payments to Group Members than that provided for in clause 12.4 of the Scheme. I reject that submission. It is inconsistent with the terms of the correspondence itself. The correspondence indicates that if judgment were to be delivered, then that would then initiate administration of the Scheme.
That is what occurred. Judgment was delivered on 19 September 2022. That furnished the “Effective Date” for the purposes of the Scheme. All other dates agreed between the parties to the Scheme follow from that date. As at the delivery of judgment, no application was made either by the lead applicants or the Administrator for an order truncating the three month period provided for in clause 12.4 so as to ensure that payments to Group Members would be made by Christmas. I reject the submission that the Administrator has moved promptly to seek the particular relief now claimed.
Section 33V(2) of the Act provides that if a court gives approval under subs (1), it “may make such orders as are just with respect to the distribution of any money paid under a settlement or paid into the Court.”
I am satisfied that I have jurisdiction to entertain the present application. However, the power itself must be construed in accordance with its terms. I consider that it is open to the Court to make an order under subs (2) with respect to the distribution of any money paid under a settlement or paid into the Court after the date that the orders granting approval is made. However, that power is discretionary and is conditioned on the Court being satisfied that such an order is “just” in all of the circumstances.
In having regard to what is just in all of the circumstances, the starting point is that the parties themselves have agreed a timeframe for the calculation and distribution of payments. It may well be that it is achievable for the respondents, whether at some expense or otherwise, to arrange their affairs so that payments could be made and completed before 3 March 2023. However, that does not mean that it is just to require the respondents to do so. Nor does it necessarily support a conclusion that the respondents are acting in bad faith in the discharge of their obligations under the Scheme.
The respondents, under the Deed and Scheme approved by the Court, have both contractual obligations and contractual rights. They are entitled to take steps in the order provided and in the timeframe specified in the Scheme.
Of course, if the Court were to form a view that the respondents are (or that there is a reasonable basis to apprehend that they are) in breach of clause 12.4 (properly construed), I consider that the Court may intervene under s 33V(2) of the Act. It may do so including for the purpose of making orders providing for different timeframes for payments other than that agreed between the parties.
To the extent that the Administrator has brought this application on the basis that the Court may determine a new timeframe that it considers to be reasonable (absent evidence supporting an allegation of actual breach or apprehended breach of the Deed) I doubt that the Administrator has the contractual authority to do so. By virtue of the clauses referred to earlier, the role of the Administrator is not to advocate on behalf the beneficiaries of the Deed for terms that the Administrator considers might be more beneficial had they been agreed. Rather, the role of the Administrator is to administer the Scheme in accordance with its terms, not to question those terms. Accordingly, to the extent that the Administrator invites the Court to impose a lesser timeframe on the respondent than that stipulated by clause 12.4 of the Scheme, I do not accept that is a proper application for the Administrator to make.
Nor do I consider such application falls within the scope of the grant of exercise of the liberty to apply. That grant authorised the Administrator to act in accordance with clause 3 of the Scheme. As such, the Administrator had liberty to apply in relation to any matter arising under the Scheme. Whether the terms of the Scheme should be rewritten does not fall within the grant.
It is, however, within the authority of the Administrator to draw to the Court’s attention any reasonably apprehended breach by the respondents of the terms of the Scheme, including any apprehension that the respondents are anticipating making a “bubble payment”.
As to the evidence on that topic, the Administrator’s affidavit refers to inquiries it made to a bookkeeping firm, Adelaide Hills Bookkeeping. That inquiry, according the Administrator, was directed toward understanding the administrative burden of processing the payments to a class of approximately 200 people.
The Administrator’s affidavit states that Adelaide Hills Bookkeeping was briefed that payments would need to be made to over 200 individuals who are to receive settlement payments, and that all payment details would be provided to Adelaide Hills Bookkeeping in an appropriate format to facilitate payment. The Administrator says that his staff were told by Adelaide Hills Bookkeeping that they could complete all payments on or before 19 December 2022 provided that they had received all relevant information on or before 15 November 2022 and the work would cost $24,860.
The respondents rely on an affidavit of their solicitor, Mr Mark Jackson. He says that he caused a colleague to make further inquiries of Adelaide Hills Bookkeeping about that quote. He reports that the quote was inaccurate or misleading for multiple reasons. First, it was based on a flat rate. Second, it did not include any time for checking the employee details as set out in the Group Member database against identification documents to ensure that names had been recorded accurately. Third, it did not include any work in relation to calculating PAYG withholding amounts. Fourth, it did not include the physical payment of Settlement Entitlements to Group Members which would need to be undertaken by the respondents (although there was some potential for a payment file to be created that might streamline the processing of payments). Mr Jackson deposes that the representative of Adelaide Hills Bookkeeping said that she needed to consider how many of her team of 12 would be dedicated to the project and that that would depend, among other things, on the timeframes within which the work was to be completed.
On the basis of the evidence of Mr Jackson, I am not satisfied that the inquiry with the external bookkeeper takes the Administrator’s case as to breach anywhere. The quote obtained from Adelaide Hills Bookkeeping does not provide a sufficient basis for the Court to conclude that the order sought by the Administrator should be made. I do not consider that material supports a finding of bad faith or breach on behalf of the respondents. Furthermore, I do not consider the terms of the Deed impose any obligation on the respondents to outsource the work required to facilitate and make the settlement payment at its own expense in order to ensure that payments would be made in a shorter timeframe than the three month period provided for in clause 12.4.
As the respondents submitted, the provision of the three month timeframe within the Deed is not on its face an unreasonable timeframe. It is neither necessary nor appropriate for the Court to inquire into all of the facts and circumstances known to the parties at the time that the three month timeframe was agreed. The respondents submit that such a timeframe may well be agreed having regard to the respondents’ cash flow interests. Even if that be the case, it would not denude clause 12.4 of its contractual force.
It seems to me that it was open to the lead applicants on behalf of the Group Members (and for that matter Adero Law as the anticipated Administrator and also a party to the Deed in its own right), to negotiate terms that might anticipate unforeseen delays in the grant of approval, or to cast the timeframes in terms that specified that it was for the Court to fix the timeframe in which payments might be made. Other clauses within the Deed contemplate that the Court itself would have a role to play, including the determination of the Costs Amount: see Thomas v Romeo Lockleys Asset Partnership [2022] FCA 1106 and Thomas v Romeo Lockleys Asset Partnership (No 2) [2022] FCA 1276. In addition, the Court made orders on 19 September 2022 not wholly approving the terms with respect to confidentiality of the Deed, and that was the subject of submissions during the course of the approval hearing. It was open to the lead applicants as at the last hearing of 14 June 2022 to make submissions as to whether or not the three months provided for in clause 12.4 might now become problematic given the passage of time since the execution of the Deed. The lead applicants did not make any such submissions either on 14 June 2022 or when judgment was delivered on 19 September 2022.
I have before me an affidavit of Ms Concettina Parente. Ms Parente is the office manager of the respondents. She manages the respondents’ administration team based in their head office. The team includes payroll, accounts payable, accounts receivable, cash office, customer debtors and reconciliation of online sales. She sets out the steps for paying the Settlement Entitlements (in [9]), including the entry of employment information and data into the various computer systems. That is done manually when they commence their employment. However, she deposes that it is now necessary to manually enter the details of Group Members who are not current employees into the payroll database as if they are new starters.
Ms Parente deposes that only three of the Group Members participating in the settlement are current employees. She deposes that whilst the respondents would have information about the Group Members who are not current employees as part of its ordinary record keeping obligations, that information is not active within the payroll systems. She deposes that the respondents have obligations to make PAYG tax instalments from those payments and that she must also ensure that the respondents report payroll information relating to the settlement payments to the Australian Taxation Office through the so-called Single Touch Payroll reporting requirements.
At [17] Ms Parente sets out the work required with respect to the data entry process. At [18], Ms Parente states that she has been instructed by the director of a respondent (Mr Anthony Romeo) that Group Member Entitlements will be paid “in regular batches in line with the upload of the Group Member details into Sybiz”. Ms Parente states her belief that the Administrator is seeking to expedite payments so that it occurs prior to Christmas. She says that she does not believe that was possible given her experience with the respondents’ payroll system. Ms Parente says there are other factors that affect the availability of the respondents’ administrative resources and among those she states that the respondents have only just in the last week or two received the Group Members data from the Administrator.
Ms Parente says that the information was originally required by 29 September 2022, and she has “lost about four weeks that could have been used uploading employee data into the payroll system” as a consequence. She says that the administration team is already stretched as a result of the loss of staff over the last couple of years. She goes on to say that the timing of the settlement approval and the calculation of Settlement Entitlements now clashes with Christmas, and that was not something she had anticipated. She continues:
Whilst a lot of work will be involved in creating the payroll database and processing payments, I am confident that it can be completed in the three-month time period allowed by the Settlement Distribution Scheme. However, it cannot be done faster than that.
I am asked to infer from this evidence that all that I have before me is a hearsay statement on the part of Ms Parente that she had been instructed by a director of the respondent that entitlements were to be paid in regular batches. That statement is not inconsistent with the requirement under clause 12.4 as I have interpreted it, namely, that payments are to commence on and from a certain date and are to be completed by 3 March 2023.
The Administrator complains that the evidence is lacking in detail as to what batches, when they are to be paid and which employees will receive which moneys. But that is not information to which the Administrator is entitled under the Deed.
The Deed provides for the provision of payments to commence on and from one date and finish by another. That is the information that should be conveyed to Group Members, or at least those that are making inquiries. In addition, the Deed itself contains a schedule which provides a form to be sent to Group Members titled “Settlement Statement” in which there is a reference to payments being made as soon as practicable and not later than by the relevant date, being the three month deadline.
Hence, whilst the Administrator might consider it desirable that he be in a position to give individual Group Members a certain date as to when a payment might be made to each of them, he is under no obligation under the Deed to do so, and the respondents are under no obligation to furnish him with information at that level of detail.
I am satisfied by reference to the evidence of Ms Parente that there is a connection between the Administrator’s own delay in providing the Group Member database and the ability of the respondents to facilitate payments before Christmas. I accept the evidence of Ms Parente at [20] of her affidavit in that respect.
The Administrator might have been in a stronger position on the present application if it could be shown that it took all reasonable steps that it could to ensure that payments could be made before Christmas. These steps include providing the Group Member database at an earlier time so that the manual entry of data could have commenced at an earlier time.
It was then submitted by the Administrator that the true reason for the “delay” or anticipated delay in the making of payments was a motivation of the respondents to maintain their cash flow. That allegation is not made good on the evidence before me.
As I have mentioned, there was a reference to cash flow in Counsel’s submissions, but it was made in the context of referring to the three month period agreed between the parties in clause 12.4 of the Scheme. A party in the respondents’ position is entitled to negotiate a clause of that kind with due regard to its own interests including its cash flow interests. I do not consider that the affidavit of Ms Parente or any other material before me gives rise to, or supports a finding or even a concern that the respondents are proposing to make payments other than in a progressive way throughout the relevant three month period as the Group Member data is uploaded into the respondents’ systems, nor am I satisfied that on the material before me there is evidence of bad faith on the part of the respondents.
An obligation to act in good faith does not constitute an obligation to agree to vary terms of the Deed or to act other than in accordance with clause 12.4.
That is not to say that it is not in the interests of the Group Members to receive their payments earlier. But that is not the test on this application. The test is what the Court considers to be “just”. I do not consider it to be just, in the absence of evidence of breach or bad faith on the part of the respondents, to make orders that I consider would amount to a rewriting of the agreement struck between the parties, all of them competently represented at the time that the Deed and the Scheme were agreed.
The circumstance that the Christmas period is approaching (so creating a circumstance that the administrative resources of the respondents might be more strained than usual) to my mind does not support an allegation of bad faith or give rise to a situation where the Court should impose upon the respondents any obligation other than that set forth in the Deed.
I accept that the role of the Administrator includes an obligation to protect the interests of the beneficiaries under the Deed. But the relevant interests of those beneficiaries is their interest in having the Deed administered in accordance with its terms. As I have emphasised earlier in these reasons, it is not the role of the Administrator to agitate for more attractive terms.
Finally, I have had regard and given weight to the circumstance of the delay between 14 June 2022 when judgment was reserved and 19 September 2022 when approval was ultimately granted. It was not submitted by the Administrator that that delay was itself the product of some maladministration on behalf of the Court itself. I accept that it is a factual circumstance forming a part of the background against which this application falls to be decided. However, to the extent that the Group Members had an expectation that approval would be granted in a shorter timeframe, then that expectation has arisen without a proper foundation. In all cases where the Court is considering whether or not to grant approval of a settlement, the Court will take the time that is necessary to exercise its powers in accordance with the law and to consider issues having regard to all of the facts and circumstances. In this case they included the facts and circumstances set out in my judgment published in Thomas.
Group Members should not be told that they can expect payments within any timeframe other than that specified in the Deed. Their expectations can and should be managed by the Administrator accordingly.
It follows that I will not grant the relief sought by the Administrator’s minute of order.
I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Charlesworth. Associate:
Dated: 15 November 2022
0
2
0